The grain deal has lost its meaning due to the EU’s refusal to connect Rosselkhozbank to SWIFT

The European Union proposes to use antiquated methods of transmitting financial messages

In the coming days, Turkey, the UN, Russia and Ukraine will hold online talks on a number of outstanding technical aspects of the grain deal. Meanwhile, the fate of this international humanitarian project, extended the day before until July 17, is hanging in the air. In fact, its prospects are crossed out by one single circumstance: the European Union does not want to reconnect the Russian Agricultural Bank to the SWIFT system, designed to serve the “Russian part” of the deal – a memorandum with the UN.

This document, signed in Istanbul, provides for the unblocking of Russian exports of food and fertilizers to the poorest countries. It is understood that all transactions will go through the Russian Agricultural Bank. But he is disconnected from SWIFT, which makes the task impossible.

The participants in the expected four-party consultations are a priori unable to resolve this key issue, since it belongs to Brussels’ area of ​​responsibility. Which again made it clear that he did not intend to change his position. According to the official representative of the EU Foreign Service, Peter Stano, the measure against Rosselkhozbank is part of the sanctions imposed by the West in response to Russia’s conduct of a special military operation in Ukraine. Accordingly, there will be no progress until the end of the conflict.

Instead of SWIFT, the European Union in March of this year allowed Rosselkhozbank to use fax and e-mail. And in April, the US Treasury gave the green light to the processing of his transactions by the American bank JPMorgan Chase & Co. Of course, both of these options cannot technically replace SWIFT. According to Russian Foreign Minister Sergei Lavrov, Moscow is offered only “one-time alternatives” that do not allow for a systematic solution to the problems of food shortages on world markets.

“The UN Secretary General asked three American banks to replace SWIFT and help Rosselkhozbank serve export operations,” the minister said at the end of April. – Several months have passed and, indeed, one of the banks (JPMorgan Chase & Co) “kindly” agreed to finance one operation. But when we are told that all future work must be built on this principle, this is not serious.

SWIFT is a generally accepted international financial messaging system. With its help, banks of different countries exchange information with each other. In a very simple way, this is a kind of analogue of “Gosuslug” for the banking sector, says the head of the analytical department of Amarkets Artem Deev. Of course, you can personally visit the desired department and submit all documents in paper form – but it is much more convenient to do this through the electronic portal.

“It’s the same with banks,” says Deev. – SWIFT, which was launched back in 1977, is connected to 11,000 credit institutions around the world. Of course, there are alternatives, and banks can use any means of communication, even the exchange of telegrams or courier mail. But, firstly, SWIFT is fast and convenient. And secondly, it’s safe. Few things can match the efficiency of working with a global network of contractors. JPMorgan Chase&Co, of course, will help Rosselkhozbank carry out cross-border settlements. But this will come with additional difficulties and delays. That is, this is not a full-fledged alternative – but rather, such a banking palliative.

The average transmission time of a regular message via SWIFT fluctuates around two minutes, during which multiple mutual confirmations of delivery occur. E-mail, fax – this is not even yesterday, but the day before yesterday, no one seriously considers these options and does not use them in practice. Until the message arrives at the bank, until it is processed, until it is confirmed, a lot of time will pass. And in the conditions of a huge volume of transactions and funds associated with agricultural exports, the factor of efficiency, high speed of data processing is of critical importance. In addition, email and fax are considered extremely unreliable, insecure channels, reminds financial analyst Sergei Drozdov. The advantages of SWIFT lie in the active use of computers, cryptography, authentication, standardization of messages and their automatic processing.

As Turkish Foreign Minister Mevlut Cavusoglu said in early May, although the issue of reconnecting Rosselkhozbank to the SWIFT system is being discussed as part of a dialogue on the possibility of extending the grain deal, there are no guarantees that Western companies will want to cooperate with it. According to the minister, in early May, UN Secretary General António Guterres proposed a variant in which a Turkish bank would act as an intermediary. But apparently, this initiative will also not be continued.